Mortgage Insurance Premium (MIP)

MIP is a type of insurance that is required on all FHA loans regardless of how much equity is in the property. MIP is a fee charged to the borrower by FHA to insure the loan against default. It is paid upfront at the time of closing and is also included in the monthly mortgage payment. If a borrower puts at least 10% down, the MIP will be removed after 11 years. If a borrower puts less than 10% down, the MIP is required for the life of the loan.